Heritage Insurance (HRTG) investor relations material

Executive summary

• Achieved record Q1 net income of $36.5 million ($1.19 per share), up 19.7% year-over-year, driven by strong underwriting, higher investment income, and disciplined expense management.

• Net loss ratio reached its lowest Q1 level since 2015, improving by 3.8 points to 45.9%, with lower weather-related and attritional losses.

• Gross premiums written declined 2.6% year-over-year, mainly due to reduced commercial residential business, while personal lines premiums increased.

• New business written increased 62.7% year-over-year and over 30% sequentially, with policy retention at 88%.

• Strategic expansion into new states, including Hawaii and planned entry into Texas, with four new products launched and six more planned for 2026.

Financial highlights

• Net income of $36.5 million, up from $30.5 million in Q1 2025; EPS of $1.19 vs. $0.99.

• Net investment income rose 15.1% to $9.9 million.

• Net premiums earned were $199.7 million, nearly flat year-over-year; gross premiums written down 2.6% quarter-over-quarter.

• Book value per share rose to $17.15, up 4.6% from year-end and 61.5% year-over-year.

• Cash flow from operations was $24.9 million for the quarter.

Outlook and guidance

• Premium growth expected to turn positive in Q2 or Q3, with full-year growth anticipated.

• Continued focus on underwriting discipline, rate adequacy (achieved in over 90% of territories), and prudent growth, with expansion into Texas and further product diversification.

• Reinsurance costs expected to decline, benefiting policyholders through premium reductions while maintaining margins.

• Inflationary pressures are moderating, and legislative reforms in Florida are expected to support improved margins.

• Plans to leverage data analytics and AI for profitability and efficiency.